The economic climate is the 3rd worst in Latin America.
Calculated by FGV based on expert opinion on the local economy, Brazil's Economic Climate Index (ICE) stood at 3,8 points in July of this year, a drop of 32%; Brazil's score was only higher than that of Venezuela and Argentina.
Vitor Abdala
Reporter from Agência Brasil
Rio de Janeiro – Brazil's Economic Climate Index (ICE) stood at 3,8 points in July of this year, the third lowest in Latin America among 11 countries surveyed. Brazil's score was only higher than that obtained by Venezuela (1 point, the minimum score) and Argentina (3,6). The index is calculated by the Getulio Vargas Foundation (FGV).
The indicator, calculated based on expert opinion on the local economy, fell by 32%. In April, the Brazilian ICE reached 5,6 points. The July result was also slightly below the average of 6,1 points observed over the last ten years.
The average ICE (Index of Economic Confidence) in Latin America in July was 4,4 points. In April, it had been 5,2. The best results were obtained by Paraguay (7,3), Colombia (6,1), Peru (5,6), Bolivia (5,4), Uruguay (5,3), Mexico (5,3), and Ecuador (5). Chile was at the average (4,4). Only two countries showed improvement in the indicator between April and July: Colombia and Uruguay. Bolivia remained stable, and the others experienced a decline.
In Brazil, experts are more pessimistic about both the current situation and the future. The Expectations Sub-index, which assesses the situation for the coming months, fell from 6,4 points in April to 4,2 in July. Meanwhile, the Current Situation Sub-index fell from 4,7 to 3,3 points during the same period.
Since both sub-indices are below 5 points, Brazil is in a recession phase, according to the study. In April, the country was in the recovery phase (when the Expectations Sub-index is above 5 and the Current Situation Sub-index is below that value). The other two categories in the survey are expansion (when both sub-indices are above 5) and worsening (when the Current Situation is above 5 and Expectations are below that value).
The global average of the ICE (Intellectual Confidence Index) fell from 5,4 in April to 5,2 in July. Among the top ten countries in the survey, only the United States and three European countries showed improvement between April and July. The United States rose from 5,2 to 5,6 points. Germany climbed from 6,3 to 6,4; the United Kingdom from 5,1 to 5,9; and France from 3,1 to 3,9.
Japan's score fell from 6,3 to 5,9 points. In addition to Brazil, the other four BRICS countries also saw a decline in the indicator: China (from 5,8 to 4,4), India (5,6 to 4,9), Russia (4,5 to 4,1), and South Africa (4,3 to 3,9).
Editing: Denise Griesinger